06-07-2004 WS - Laserfiche WebLink

Home Browse Search

Item No. 1B Meeting Date: June 7, 2004 Type of Business: Work Session City Administrator Review: ______ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Charles Hansen, Finance Director Item Title/Subject: Discussion of Priorities for the 2005 Budget In the coming weeks, the staff will begin working on the details of the 2005 budget. Many of the key issues were discussed in the Five Year General Fund Operating Budget Projection, the preceding item on this agenda. This item is placed on the agenda to give the City Council the opportunity to provide input early in the process. Department Heads can then use this guidance as they work on the details of their proposed budgets. Key 2005 Budget Issues: Loss of state aid The State of Minnesota enacted cut in local government aid (LGA) that impacted the City of Mounds View in 2004 and again in 2005. The 2005 loss is $360,238. Operating expenses LGA cuts for 2004 amounted to $450,000. The state allowed the City to make up 60% of this as an increase in the property tax levy. The other 40% ($180,000) plus all allowances for inflation had to be absorbed by budget cuts. Departments cut these amounts from their draft budgets before they were ever presented to the City Council last August. This was done almost entirely in areas that were not visible to the public. Making cuts this year without impact on public services will be far more difficult. If the City Council wants cuts in the budget, they should be prepared to identify service areas that can be reduced. Property tax levy At this time, it appears that there will not be levy limits in place for 2005. This gives the City Council the option of raising property taxes to cover the $360,238 loss of LGA and inflation.